Cryptocurrency blockchain ‘The Banks Are Broke’: This Viral Video From 2013 Is More Relevant Than Ever

Cryptocurrency blockchain ‘The Banks Are Broke’: This Viral Video From 2013 Is More Relevant Than Ever

“All the Banks Are Broke,” and they’ve only got worse. Quantitative easing forever? The threat of cryptocurrencies will disrupt the financial sector. A video from 2013 depicting a European minister’s tirade against the global banking system has recently re-emerged and gone viral. Gaining massive traction within the crypto community, the speech is now more relevant…

A video from 2013 depicting a European minister’s tirade against the global banking system has recently re-emerged and gone viral. Gaining massive traction within the crypto community, the speech is now more relevant than ever — and central banks know it.

Cryptocurrency blockchain “All the Banks Are Broke”

Within an impassioned speech, British politician and former member of European Parliament (MEP) Godfrey Bloom thoroughly dismantles the global banking sector, proposing that banks are ‘broke” and highlighting what he calls institutional “incompetence and chicanery.”

Watch: Godfrey Bloom’s tirade against the financial sector

Packing in as much vitriol as one can within a two minutes, Bloom systematically tears the financial system apart.

Aiming at the sector’s penchant for fractional reserve banking, the former-MEP remarks that “banks lending money that they don’t actually have” is tantamount to a “criminal scandal.”

Financial institutions around the world have been operating fractional reserve systems for many years. The practice entails using the vast majority of customer deposits to generate profit via interest rates on loans. This results in a mere fraction of bank deposits (10% for larger institutions) remaining available for withdrawal.

Bloom also focused on the moral hazard within banking, alluding that the government’s promise to bail out banks—as they have done time and time again—encourages riskier behavior.

We have counterfeiting, sometimes called ‘quantitative easing,’ but counterfeiting by any other name—the artificial printing of money—which, if any ordinary person did, they’d go to prison for a very long time, and yet governments and central banks do it all the time.

Cryptocurrency blockchain Quantitative Easing Can’t Last Forever

In the decade since the financial crisis, the world’s central banks have combated rising interest rates by buying copious quantities of government debt—aka QE.

Watch: Trump calls for negative interest rates.

In 2019 following a dovish turn from the U.S. Federal Reserve, global economies started upping their fiscal policy games. Among the more unconventional monetary maneuvers was QE.

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It is much more likely we will have to turn to the tools we used in the financial crisis […] I believe we will use them aggressively should the need arise to do so. There is no need to do that now but we will use those tools aggressively.

Watch: Jerome Powell tells lawmakers a return to Q.E. is on the cards

The problem is, many economists—as well as the World Economic Forum (WEF)—have noted that QE may not be as effective as it was last time. According to its 2019 annual Global Competitiveness Report, the WEF opines that unlike 2008, the next recession will leave central banks with “fewer policy options.”

To keep the threat of crypto at bay, many institutions accept that it’s time to overhaul the antiquated financial system via central bank digital currencies (CBDCs).

From the Bank of England-led research collective to the People’s Bank of China’s incipient CBDC, central banks all over the globe are hurrying to either implement a digital currency or actively research them.

Every major central bank is currently taking a deep look,” Powell said, “We feel that’s our obligation, technology has now made that possible. I think it’s very much incumbent on us and other central banks to understand the costs and benefits and tradeoffs associated with a possible digital currency.

The pressure to compete with China, combined with private sector initiatives such as bitcoin and Facebook’s Libra, it’s do or die time for the U.S. and Wall Street.

Disclaimer: The opinions expressed in this article do not necessarily reflect the views of CCN.com.